In the year 2000, an estimated 70 billion checks were written in the United States alone. This translates into approximately 270 million checks being processed every business day. Monitoring and tracking the flow of checks is a complex procedure that is highly error-prone.
The check processing system is based on the special numbers and symbols on the bottom of checks and their ability to be recognized magnetically by devices called readers or sorters. These numbers and symbols—and the technology that process them—are generally referred to as Magnetic Ink Character Recognition (or “MICR”). MICR is a character recognition system that uses special ink and characters to identify banks and accounts to or from which funds will be deposited or withdrawn. When a document (e.g., check) that contains this ink needs to be read, it passes through a machine (e.g., sorter) which magnetizes the ink and then translates the magnetic information into characters.
When properly implemented, MICR provides a secure, high-speed method of scanning and processing information. However, when a reader/sorter cannot process the MICR number and characters automatically, or the MICR number and characters are incorrect, a check may be rejected. The MICR information must then be manually re-keyed by someone on a special encoding device, a correction label applied to the bottom of the check, and the check resubmitted. Common MICR errors include the listing of applications types (e.g., deposit, withdrawal, and loan systems implemented by a bank) on the MICR line that do not correspond to the customer's selected bank. For example, if a customer bank is in Illinois, an check processing error will result if the application type (e.g., deposit system) listed on the MICR line does not correspond to the deposit system actually used by the Illinois bank. In such a case the MICR line numbers would not match up, and the check will not be processed properly.
To reduce the likelihood of errors, quality assurance testing on MICR lines is typically conducted. The process currently involves the generation of MICR “decks” which consist of spreadsheets that include credit and debit entries or transactions that simulate customer activity (e.g., deposit, withdrawal, etc.). A particular deck may include an amount of money to be deposited into a particular account at a particular bank. Test decks are fed into a MICR system to verify system integrity and detect any errors that may be occurring during processing.
However, current MICR line testing suffers from several notable drawbacks. For one thing, the process is completely manual and thus error-prone. MICR decks include large amounts of data that must be manually entered onto a spreadsheet by a team member. Once completed, the spreadsheet is delivered to other team members who conduct quality review and perform necessary edits. During the review and editing process, each line must be carefully reviewed to ensure that all related data has been entered correctly. If an error is located, the reviewer must sift through a large binder of information to identify the correct data or information, and then must take steps to correct the mistake. Needless to say, the level of detail required to check for errors makes the review process itself vulnerable to error, all of which further compounds the problem.
These and other problems exist.